Here’s Why You Should Consider Flipping Some Bitcoin for Ethereum

It seems as if reason completely disappeared over the weekend as the crypto markets shot through the roof. Just 25% away from the psychological barrier of $10k now, it is important to ask the question: what’s next?

We’re going to look at three major markets today. First, we have the equity market. It was performing down last week, and many believed this to be part of the reason why Bitcoin was doing so well. As a non correlated asymmetric bet, it has become the asset to invest in when you are losing confidence in the current system. However, now that equities have performed better this week, how will this affect the cryptocurrency market?

Next, we have Bitcoin. There are several reasons why it has done so well in the last month (hitting 10-month highs), but nothing that is strong enough to explain the price doubling in about a month. For this reason, it seems more likely we will see a pullback. The price of Bitcoin is about 50% below its all-time high, whereas Ethereum is about 80% below its all-time high. This makes it feel likely that a correction back to some sort of a correlation will occur.

The altcoin market has a far more interesting dynamic at play. Binance has suspended withdrawals and deposits following the hack that cost them $40 million in Bitcoin. As a result, users have not been able to get their funds into what is the largest cryptocurrency trading exchange (by daily volume). This has kept prices down, and now that Binance has reopened deposits around mid-day on May 15th, we should expect to see some of the smart money moving into the altcoin space as well.

Direction of the Markets

If we are now in the bull market territory, how long will it be sustained? Binance has reopened today after executing a system update post hack, and I would expect to see money flood from BTC into other coins, especially the mid-tier ones that aren’t yet available on Coinbase.

The interplay of these three markets will inform the next few weeks of trading, as a balance will need to be struck. The equity market has been on a 10 year bull run and is due for a crash, and that could be part of why the Bitcoin pump was so quick to attract traders. There is a certain amount of FOMO here, but there are also retail and institutional investors who are looking for the next place they can get returns.

What is the Play?

The trade recommendation I would make is to sell Bitcoin into Ether. The gap between ETH and BTC is on its way to an all-time high, and that makes for a great arbitrage opportunity. Even with recent price increases, ETH is sitting way below the price implied by BTC’s pump. And that discounts all the big changes and progress that have occurred within the Ethereum community since the last bull market.

Either ETH will go up, or BTC will go down. The gas in this pump seems to be disappearing (for the time being) and for those who want to lock in some of their BTC gains, it seems like a great time to sell out and then buy the dip in a few weeks.

And don’t forget that if ETH does go up as it seems likely to do, you can always flip back into Bitcoin using the gains you just accrued. If bitcoin is down, the profits you made on ether will go a long way.


Do you have a long term hold on bitcoin? And what is your strategy?

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:slight_smile: you are on to something here…


Buy the dip at around $6400 if it drops that low

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I think that if btc goes down the rest will follow, don’t remember many cases that this didn’t happen.


Crypto Update: Inverse Relationship of Bitcoin and Binance Coin

August 6, 2018 Kiril Nikolaev, CFA Analysis, Technical Analysis

Every story that has captivated the imagination of the modern man features a scintillating protagonist going up against a menacing antagonist. For all the strength, tenacity, or intelligence of the hero, it is often matched, if not, exceeded by the antihero. We see this relationship embodied between fictional characters; Batman and the Joker, Professor X and Magneto, Neo and Agent Smith, and many others.

No one is greater than the other; just two entangled forces moving in opposite directions. In the cryptocurrency world, no pair share this relationship more tangibly than Bitcoin (BTC/USD) and Binance Coin (BNB/BTC). In this article, we show the inverse relationship of Bitcoin and Binance Coin.

A Tale of Two Reversals – Bitcoin vs. Binance Coin

On December 27, 2017, Bitcoin was just coming off of an all-time high of $19,891. Investors were euphoric. Even though the market was up by over 1,957% for the year, gurus and experts urged people to buy the dip. The correction was temporary, they said, as Bitcoin’s year-end-target was around $22,000.

They were wrong because on that day, BTC/USD printed its first lower high in months. The lower high was the first sign that the bull run was over.

BTC/USD daily chart in December 2017

While BTC/USD was showing signs of exhaustion, BNB/BTC broke out of a rounding bottom reversal pattern on the daily chart. It signaled the start of the pair’s seven-month uptrend.

BNB/BTC daily chart in December 2017

Uncanny Trend Continuation Timing

With a lower high in place, Bitcoin began to unravel. On March 5, 2018, it generated another lower high of $11,700. Two months later, it created another lower high of $9,990 on May 5. Bears were in full control of the market.

BTC/USD lower highs

On the other hand, BNB/BTC was on a bullish rampage. The pair generated a higher low on March 7, 2018 of 0.0008325. Exactly two months later, on May 7, BNB/BTC posted another higher low of 0.0014002.

BNB/BTC higher lows

The correlation and the timing is uncanny. For Bitcoin, the lower high signalled not only the start of a bearish rally but apparently, also a higher low setup for Binance Coin. This happened twice and on both occasions, Binance Coin posted higher lows two days after Bitcoin generated lower highs.

Fortunes Reverse Once More

By late June, gloom and doom Bitcoin forecasts circulated the internet. Many were predicting that Bitcoin would hit $4,000 levels while some predicted a move down to $2,000. As we all know, none of that happened as Bitcoin managed to bounce on June 29 after coming off a low of $5,755. The bounce catapulted the market to as high as $8,506.7 on July 24.

Recent rally of BTC/USD

Interestingly, BNB/BTC ended its bull run on June 29 after it breached 0.0024 support. This triggered the double top pattern on the daily chart and started a selling frenzy. Exactly one month later on July 24, the pair bottomed out at 0.0014286.

Recent bear run of BNB/BTC

At this point, the inverse relationship between Bitcoin and Binance Coin has made itself obvious. If you want to know where Bitcoin is going, one indication would be to look at the performance of Binance Coin and expect the opposite results. The same is true for Binance Coin.

Bottom Line

Bitcoin and Binance Coin seems like two entangled forces moving in opposite directions. If Bitcoin/US Dollar climbs, expect Binance Coin/Bitcoin to drop. On the other hand if Binance Coin/Bitcoin bounces, Bitcoin/US Dollar will most likely correct. It appears that the inverse relationship between the two is obvious by now.